R3 Capital Management, the credit hedge fund ship founded last summer by former Lehman Brothers executive Rick Rieder, has been acquired by money manager BlackRock.

According to an internal memo, BlackRock will “assume management responsibility for R3’s multi-strategy credit hedge fund,” which manages $1.5 billion. Rieder will join BlackRock as head of the fixed-income alternatives portfolio team. Very little cash will change hands, The Wall Street Journal reports, adding that the deal has been agreed upon but has not yet closed.

Reider set up R3 in May after leaving Lehman, where he was head of its global principal strategies group. Lehman, like BlackRock, was an early backer of R3, owning a 45% stake in the firm, and the hedge fund bought about $5 billion in assets from the soon-to-be-bankrupt bank.

Lehman sold its stake in R3 in October, after filing for bankruptcy. R3 was also burned by the asset freeze stemming for the bankruptcy, leading to most of its roughly 30% in losses last year.